Note J - Earnings Per Share

3 Months Ended

Mar. 31, 2022

Notes to Financial Statements

Earnings Per Share [Text Block]

Note J - Earnings Per Share

In periods in which the Company has net income, the Company is required to calculate earnings per share (“EPS”) using the two-class method. The two-class method is required because the Company’s Series A Preferred Stock is considered a participating security with objectively determinable and non-discretionary dividend participation rights. Series A Preferred stockholders have the right to participate in dividends above their five percent dividend rate should the Company declare dividends on its common stock at a dividend rate higher than the five percent (on an as-converted basis). Under the two-class method, undistributed and distributed earnings are allocated on a pro-rata basis to the common and the preferred stockholders. The weighted-average number of common and preferred stock outstanding during the period is then used to calculate EPS for each class of shares.

In periods in which the Company has a net loss, basic loss per share is calculated using the treasury stock method. The treasury stock method is calculated by dividing the net loss by the weighted-average number of common shares outstanding during the period. The two-class method is not used, because the calculation would be anti-dilutive.

Reconciliations of basic and diluted EPS were as follows:

	Three Months Ended March 31,
In thousands, except per share amounts	2022			2021
Numerator:
Net income (loss)	$	3,345		$	(1,758	)
Less: Preferred stock dividends		122			122
Less: Earnings attributable to participating securities		404			—
Numerator for basic EPS: income (loss) attributable to common stockholders		2,819		$	(1,880	)
Effect of dilutive securities:
Add back: Allocation of earnings to participating securities		404			—
Less: Re-allocation of earnings to participating securities considering potentially dilutive securities		(389	)		—
Numerator for diluted EPS		2,834			(1,880	)
Denominator:
Basic EPS denominator: weighted-average common shares outstanding		6,991			6,651
Diluted EPS denominator		7,286			6,651
Basic income (loss) per Common Share	$	0.40		$	(0.28	)
Diluted income (loss) per Common Share	$	0.39		$	(0.28	)

For the three months ended March 31, 2022 and 2021, respectively, the following shares have been excluded from the calculation of shares used in the diluted EPS calculation: 15,074 and 86,156 shares of anti-dilutive market price options; 76,925 and 761,421 of anti-dilutive unvested restricted shares; and 1,001,614 and 1,001,614 shares of anti-dilutive Series A Preferred Stock (as if converted).